The Punjab States Agency was an agency of the British Raj. The agency was created in 1921, on the model of the Central India Agency and Rajputana Agency, and dealt with forty princely states in northwest India formerly dealt with by the Province of Punjab.

After 1947, all of the states chose to accede to the Dominion of India, except Bahawalpur, which acceded to the Dominion of Pakistan.

After the 1809 Treaty of Amritsar, most Cis-Sutlej states came under British protection. Following the First Anglo-Sikh War and the Treaty of Lahore & amritsar in 1846, several princely states such as Kapurthala, Jammu and Kashmir, and the hill states between the Beas and Ravi—previously part of the Sikh Empire—also came under British influence and were administered under the Punjab. Chamba was added to Jammu in 1846 but was separated from Jammu and established as a separate state in 1847. Jammu and Kashmir remained under the administration of the Punjab State until 1877, when it was placed under the direct political control of the Government of British India.

While the hill princely states south of the Sutlej came under the suzerainty of the British crown after the Anglo-Nepalese War of 1814–16 and became known as the Punjab Native States and the Simla Hill States. They later entered into direct diplomatic relations with the British province of Punjab, with the exception of Tehri Garhwal State, which maintained a connection with the United Provinces.

The Punjab States Agency was established in 1921 out of the previous Punjab Native States, which had received advice from the Lieutenant Governor of Punjab Province, and the Simla Hill States, advised by the Deputy Commissioner of Simla district. The agency was created under the direct authority of the Governor General of India, with its headquarters in Shimla.

By 1941, the term "Punjab Hill States" had replaced "Shimla Hill States" in formal usage — particularly in census tables, reports, and statistical summaries. Until the 1941 Census, there were 18 Punjab Hill States and 16 Punjab States. After Indian Independence in 1947, except Bahawalpur State (which acceded to the Dominion of Pakistan), all others acceded to the new Dominion of India and became part of East Punjab. Today, these regions are part of Punjab (Pakistan) and Punjab, Himachal, Haryana (India).

18 Punjab Hill State & 16 Punjab State Noted in 1941 Census

Those 16 Punjab state were Patiala, Nabha, Jind, Kapurthala, Kalsia, Faridkot, Bahawalpur, MalerKotla, Loharu, Dujana, Pataudi, Bilaspur (Kahlur), Chamba, Mandi, Sirmur (Nahan), Suket. and 18 Punjab hill states were Nalagarh (Hindur), Bashahr, Baghat, Baghat, Balsan, Beja, Bhajji, Darkoti, Dhami, Jubbal, Keonthal, Kumharsain, Kunihar, Kuthar, Mahlog, Mangal, Sangri, Tharoch.